Proposition 80: Can the Energy Genie be Put Back in the Bottle?

In 1996, the state legislature passed Assembly Bill (AB) 1890, which did away with decades of state-regulated private power monopolies and threw California consumers into the shark feeding ground of the "free market." If you don't know what happened next, go see the movie Enron: The smartest guys in the room.

Now a group of utility reformers with some labor support have put Proposition 80 on this November's ballot. Prop 80 attempts to restore some of the consumer protections which existed under the old system. At the same time, governor Schwarzenegger is supporting efforts to take deregulation even further.

The Partisan asked energy activist Robin David to explain what this is all about. Robin David is a political independent. He's a retired power plant maintenance worker, IBEW member and former shop steward. As a founding organizer of the Labor Task Force for Public Power he was instrumental in making the San Francisco labor movement a central force in the campaign to create a San Francisco & Brisbane Municipal Utilities District. That effort was aimed at regaining control of Hetch Hetchy power (generated by city-owned power plants) from Pacific Gas & Electric (PG&E). Here's what he told us:

We need to vote "Yes" in November on Prop. 80, which TURN has dubbed "The Electric Consumer Protection Initiative." It's directly opposed to efforts by the Schwarzenegger administration to breathe new life into AB 1890, the legislation that deregulated electricity. At the same time, we need to be aware of how little Prop 80 can actually accomplish.

Let us not forget that AB 1890 passed with the near-unanimous vote of Democrats and Republicans alike, and no elected official of either party has yet to call it anything but a "failed experiment," as if with some tweaking, it can still benefit consumers. Make no mistake about it, deregulation was not an experiment in benefitting the ratepayer. It was a bold attempt to hijack a vital public resource to greatly increase the profits of the electricity suppliers and reduce the costs to the biggest commercial consumers. The only failure was that they were so greedy that they ended up stepping on their own tails.

What can Proposition 80 do?

Can Prop. 80 accomplish its stated purposes? Its official title is the "Repeal of Deregulation and Blackout Prevention Act." Prop. 80 promotes the use of renewable generation and energy conservation. It puts all electric suppliers, not just the utilities, under regulation and it also calls for long-term planning, guarantees of electric availability, reinstatement of the "duty to serve" and something called "best value" pricing. Campaign literature is heavy on terms like "guarantees" and "never again."

Unfortunately, AB 1890 dismantled a system that no legislation will reassemble. Short of public power, we are unlikely to see Humpty Dumpty whole again.

For all its shortcomings and compromises, regulation created a vertical, integrated system. PG&E, Southern Cal Edison and San Diego Gas and Electric could reasonably be held to a "duty to serve" because they did everything from build power plants to generate electricity to send you a bill. They owned and controlled an entire system which made long range planning for the entire service area possible.

Prop. 80 will not bring that back. Instead, there will still be a market, now regulated by three agencies -- the California Public Utilities Commission (CPUC), the Independent System Operator (ISO) and the Federal Energy Regulatory Commission (FERC). These agencies are each beholden to different masters -- none of them rate-paying consumers and none of whom owns or physically controls anything.

It is illusory to think that numerous electric suppliers, each seeking the greatest profit, will be coerced into providing consumer-friendly electric rates, let alone a reliable and long term plan for an entire service area. A quick look at cable TV or cell phone operators will give you an idea of which is the dog and which is the tail.

Renewables and conservation

Similarly, Prop. 80 mandates goals for renewable energy sources and conservation that we would all like to see, but accomplishing those goals on a scale large enough to have a significant impact will not happen by simple fiat -- x % by such and such date.

In order for clean energy not to be constantly pitted against reliability and lower rates, major changes in building codes and public policy would have to be instituted. For instance, by building or retrofitting all government buildings with solar panels, requiring the same for all new commercial construction and providing incentives for existing residential and commercial buildings.

A public power authority whose purpose is providing a socially necessary resource, rather than various forms of profit gouging energy providers, is the only serious solution.

Vote for Prop. 80 to handcuff the profiteers but continue to fight for public power to guarantee reliable, cheaper, cleaner electric energy.